Europe - a continent of great tradition - is, regrettably, a continent in decline. Europe is in decline because of how it is currently set up: too much focus on centralisation; too little on competition and subsidiarity. It is also in decline because the proponents of its questionable moral code are not prepared to safeguard European values. The European political community is trapped in a straitjacket of its own making. It has peddled big promises and visions, in terms of how it envisages the European Union and the euro system, and is now close to collapse. The established parties have expended a very great deal of political capital and, should the EU founder, they have a very great deal to lose, meaning that they are no longer able, or willing, to make a U-turn. It is very hard for new political movements to stand up to the established parties and the media. Accordingly, referendums are a good way of overcoming barriers and taboo thinking: they can force politicians to correct their mistakes without the need, first, to go down what is a hard road through the political system. The Brexit decision worsens prospects for reforming the EU with a view to greater decentralisation; as such, it was not a good outcome. If a success is made of it, however, greater outside pressure can be put on the EU to go back to what used to be its winning formula.

Europe is not just any continent - it is one of magnificent history, of magnificent tradition. Its history has not always been without bloodshed; but through it has come change, progress and discovery. Among continents, Europe has had no peer in defining the sciences, philosophy and art. A hundred years ago it still dominated the world, not ceding its power to the United States until 70 years ago, yet in many areas it is increasingly turning into a museum - a continent that attracts tourists who see the splendour and glory of days gone by and are surprised at how quickly it has declined.

Civilisations rise and fall; historically, that is normal. Cultures flourish and fade away. The history of Europe has always been one of competition between countries and cultures. Unlike in other regions of the world, no power since Roman times has managed to establish hegemony over Europe. Envy and competition drove past generations of Europeans to surpass themselves. While centralised systems in other parts of the world might have declined on a grand scale, decline in Europe was always confined to the regional level (except, perhaps, at times of plague). Competition also became the fundamental principle of the democratic systems that were gradually established. There has been competition among parties - for voters - and competition among constitutional organs.  Europe’s values produced the market economy as a mechanism for making the best possible use of individual countries’ capabilities and resources. How, then, is it possible for Europe, of all continents, to be making so quick and so thorough a job of wrecking itself - and, to boot, within what is a democratic system?

The EU’s founders had ideological and cultural ambitions going beyond regulating competition; they aspired to overcome inequality and to transcend the nation-state, the goal being a European super-state, or ‘ever closer union’. When the groundwork was being carried out for what is now the EU, communism had failed in eastern Europe, the market economy and democracy experiments were spreading throughout the world, and many people believed that the victorious western model - democracy and prosperity for all - would be the entire planet’s template for success. The EU’s planners wanted to set an example in the process; but they did not want to take the American approach, which they found too capitalist; rather, they wanted to put a friendlier face on ‘their’ Europe.

The new Europe was to be based on a positive view of human nature and on trust in people and their goodwill. Inequality was to be overcome through public-works programmes, by expanding education, and by exporting northern and western European regions’ cultural achievements to southern and eastern Europe. It was thought that, if that were successful, a comparable level of prosperity would emerge, together with a stable political and economic model. That approach has something of the socialist view of human nature about it. Socialism sought to re-educate people - ‘liberate’ them - and the EU wanted to help the weaker members for as long as necessary to enable them to compete on an equal footing.  Templates for success, such as the German stability culture, for instance, were to be transferred on a top-down basis.

We now know that the sought-after catch-up effect has not materialised; rather, it has been superseded by transfer payments and fine words. The EU demonstrates that the lessons from the failure of socialism have not been learned. European cultures differ as regards, for instance, a willingness to work hard, the relationship between citizens and the state, or attitudes towards education. Denying the existence of those differences has produced the circumstances now tearing Europe apart.

Many British nationals have cited freedom of movement for workers as a key factor in deciding to vote for Brexit. The arrival of large numbers of people, in particular from Eastern Europe, has caused resentment among the UK population. Not everyone in EU countries with strong economies is a winner; the ‘little people’, in particular, are not benefiting; in urban areas, they are suffering as a result of new competition on the labour market, rising rents and a sense of being swamped by foreigners. Politicians have not taken their concerns seriously.

Within classical liberalism, equality means equality before the law - not equality of individuals, equality in terms of what they can achieve, or equality of cultures, gender or ideology. Top-down imposition of change on cultures that have developed over centuries has been shown to be unrealistic. Change is brought about not by transfer payments, but, rather, by social pressure. These days, regrettably, bigger transfer payments are the reward for misconduct and economic incompetence. Competitiveness is an evolved cultural achievement based inter alia on educational systems, social acceptance of corruption and cultural regard for hard work. Competition must develop as a result of people wanting to change their culture, and that of those around them, e.g. their own culture of entrepreneurship. Cultures unwilling to advance in that way should not be forced to do so. Cultural change needs to be voluntary. 

The politicians currently dominating Europe are no longer willing, at all, to acknowledge differences between people and cultures in Europe and beyond.  For them, tolerance takes precedence over all other values; and by tolerance they mean depriving the majority culture of the right to be allowed to criticise other cultures.

If political correctness dictates that no culture can ever be termed more progressive or better than others, why bother to defend European values, such as women’s rights, for instance, vis-à-vis others’ religions? Such a policy is the precise opposite of what Europe represents. Its objective is to abandon European identity. It prefers to deny cultural progress rather than question the left-wing ideal of equality.

At the same time the EU aspires, through regulation, to make far-reaching inroads into spheres of life in Europe in order to find the best possible system for the whole of Europe. That is not how progress works, however. Progress is not based on a central planner putting an idea into practice for an entire continent. It is based on allowing new ideas, on better ideas proving their worth through competition, and on bringing about inequality. Inequality leads to competition; that leads to better policy-making because successful ideas are copied. 

We must allow a number of experiments to proceed in parallel and then see who comes up with the best plan. That means that mistakes will be made. Mistakes are part of the process of discovery. There can be no innovation without a willingness to allow mistakes. ‘Creative destruction’ is what underpins the market economy and civilizational progress. We cannot use global competition as an excuse for policy failures. Voters will form a judgment on what is good policy; but they are hardly in a position to judge policy-making in other parts of the world. To make a proper decision, they need to see examples of better policy-making near home.

Many British nationals have cited freedom of movement for workers as a key factor in deciding to vote for Brexit. The arrival of large numbers of people, in particular from Eastern Europe, has caused resentment among the UK population. Not everyone in EU countries with strong economies is a winner; the ‘little people’, in particular, are not benefiting; in urban areas, they are suffering as a result of new competition on the labour market, rising rents and a sense of being swamped by foreigners. Politicians have not taken their concerns seriously.

In addition, freedom of movement for workers is not a spur to competition within Europe; it can even be a stagnation factor for some countries in that it is often the strongest who leave their homelands - where they were educated and trained - and, in doing so, leave those countries. The people that leave are often young - the driving forces behind change and renewal - and the fact they are no longer there leads to more political stagnation.  As far as this process is concerned, Erdoğan’s new Turkey is a case in point. Ideally, Erdoğan would like to banish many educated opponents of the regime: he would rather let capable individuals leave the country than allow them to challenge his rule. 

At a time when people are turning their backs on the Europe we currently have, and are looking for political ways-out, it has three fundamental options. The first is more centralisation; that is being pushed for by eurozone countries’ established parties. 

I still think that the decision to hold the Brexit referendum was right. The Brexit verdict is regrettable in that it will take a country out of the EU that could have been a driver of internal reforms. It was perhaps more of an emotional decision in favour of greater freedom and individual responsibility. That is in line with British tradition and with British cultural identity. The fact is that Germany used to be a patchwork of small states and is now a federation; its current political set-up gives the regions considerable leeway and responsibility. Germany should accordingly have teamed up with the UK to propose an alternative to what is an increasingly centrally planned and redistributive EU. Germany has missed an opportunity to have at least made an attempt genuinely to establish and enforce the principles of subsidiarity and individual responsibility. Without the British, Germany will find it hard to counter the structural majority made up of the French and the other southern Europeans. This will be a loss that will hit Germany, of all countries, particularly hard. My country needs partners that will resist the call for more and more redistribution and regulation in the EU. My hope is that Brexit is a success and that, as a result, the EU comes under greater external pressure to reform.

At a time when people are turning their backs on the Europe we currently have, and are looking for political ways-out, it has three fundamental options. The first is more centralisation; that is being pushed for by eurozone countries’ established parties. Europe would then establish more and more north-south transfer mechanisms, there would be widespread impoverishment, and the political rot would go on. The orgy of indebtedness would continue until the monetary system collapsed. The second option is decentralisation, subsidiarity and individual responsibility. ALFA has recently issued a paper on this which you can download from our website. At the heart of our vision for Europe is voluntary cooperation based on the ‘à la carte’ principle. This option would permit stable currencies and legal systems to be maintained in countries where civil society was still intact. Intra-European competition for prosperity, better governments and better money could start afresh. The third option is to abolish the EU. That would be very dangerous, as I see it, since a reformed EU could be very beneficial for Europe. As the political establishment is sticking, undeterred, to its centralising approach, the third option - I regret to say - is looking more and more likely.

We see here a weakness of the democratic system. The self-appointed elites have no intention of questioning the ‘ever closer union’ model - a model that all established parties in mainland Europe have helped create and has been elevated to the status of an article of faith. Incontrovertible truths are laid down in order to silence rivals and make it impossible for new challengers to emerge. The political parties - in Germany in particular - have done that very successfully. They have packed public-sector media organisations with hand-picked appointees; they have done the same with university department heads; and they have turned school curricula into vehicles for their articles of faith. So great has been their success that despite the failure of their own policies, and their declining electoral support, an about-turn no longer seems possible, with the long-established parties running out of young, unjaded and free-thinking politicians waiting to step up. In spite of the impending crash, the established political parties are failing to break away from the system they have created. Perhaps they themselves no longer think they have the strength to perform a volte-face and make a start on reforms. Too much political capital and credibility has been expended; and there are likely to be no more suitable potential successors. In the meantime, however, the self-appointed elites may have lost touch with reality to such an extent they now believe their own empty words. The man in the street is very much mistrusted; and the freedom to take control - for the British or the Swiss, for instance - is openly challenged. They are to be punished for failing to toe the line, and there is a widespread willingness to penalise politically incorrect actions.

We know that, in opinion polls, people often do not dare to say what they really think. Politically incorrect issues in particular regularly cause upsets, with voting outcomes differing from what pollsters have previously forecast.  Other questions on which there is seemingly a political consensus could also be put to referendums. These days, many people voice opinions in public that they do not voice in private - circumstances increasingly comparable to what people used to do in the former Soviet bloc. Accordingly, referendums are not simply an outlet for people to voice their displeasure; they are a legitimate means of changing and shaping policies.

A politically straitjacketed party system that is in denial needs a jolt from outside. In recent years, opposition parties have been set up in Europe - mainly on the right in the north and mainly on the left in the south. All of them, to varying degrees, are finding it very hard to become established; they have to recruit the right staff, build structures and organise funding; and, politically, they face hostility from the established parties and the media. In most countries, it will be some time - time that Europe no longer has - before they are in a position to take on the established parties on an equal footing.

The second option is decentralisation, subsidiarity and individual responsibility. At the heart of our vision for Europe is voluntary cooperation based on the ‘à la carte’ principle. This option would permit stable currencies and legal systems to be maintained in countries where civil society was still intact. Intra-European competition for prosperity, better governments and better money could start afresh. 

Europe is in urgent need of a revamp. Referendums are a good and sensible way of taking political decisions of such import, and of taking them fast. Referendums make it possible for the electorate to make corrections to political decisions that parties are no longer capable of making. Anyone seeking to maintain western values should be supporting referendums. Mistakes are bound to be made in the process; but mistakes are easy to correct in a competition-based system.

The Europe we have at present is foundering because the centralisers have overreached themselves. Too optimistic a view of human nature has been assumed, and false assumptions have been made in connection with cohesion processes. Europe is seeking to make more and more transfer payments so as to paper over the cracks in the system; but there are now too many cracks to paper over; and the only stopgap solutions left - to keep the system on an even keel - are unlawful. In particular a country such as the United Kingdom, which has provided major intellectual input into European culture, with Magna Carta, for example, which cut back the monarchy’s power and enshrined property rights and liberties, the Bill of Rights, which determined Parliament’s prerogatives vis-à-vis the monarchy, Adam Smith’s contributions towards understanding the market economy, and John Locke’s contributions on the separation of powers, is bound to find the European Union’s intellectual and legal decrepitude appalling.

Europe must recover its true identity. It is the pro-Europeans, as they are termed, who have failed to grasp the essence of Europe. We need an EU with a limited core remit which, through new ideas and diversity, offers a viable future. We need to get back to a situation where people can take pride in national and European values and in their own achievements. It is not a foregone conclusion that western values such as democracy and human rights should spread around the world. Europe cannot just preach to other regions; it must also show them, rather, that its social and economic model works; and only then, perhaps, can Europe again become a beacon for the world.